Consumer Finance in Vietnam - First-Half 2020 Review

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FiinGroup Joint Stock Company
Head Office
10th Floor, Peakview Tower
36 Hoang Cau, Dong Da
Hanoi, Vietnam
Tel: +84 (24) 3562 6962
www.fiingroup.vn
Ho Chi Minh City Branch
3rd Floor, Profomilk Plaza Bldg, 51-53 Vo
Van Tan, Ward 6, District 3, Ho Chi Minh,
Vietnam
Tel: +84 (28) 3933 3586
Date: Oct 26, 2020
Dear Our Valued Clients,
Re: The publication of Vietnam Consumer Finance in Vietnam,
1st Half Year 2020 Review
FiinResearch, a market research division of FiinGroup, is pleased to present
our report of Vietnam Consumer Finance, First Half-Year 2020
Review. This is the second half-year version in addition to our full year
review report series for this market. FiinGroup has also published 8
issues of full-year review on Vietnam Consumer Finance Market.
The first half of 2020 was marked with the outbreak of the global COVID-19
pandemic and its consequences. Therefore, in addition to the comprehensive
analysis of the market, we also updated in this issue an in-depth analysis of
how the consumer finance market is involving under the impact of the
pandemic in terms of market size, market share and financial performance
amongst key players, prominent trends such as product development, digital
adoption and movements of alternative lenders.
During the research work, leveraging on our extensive business network, we
have conducted various discussions with key industry players to capture the
in-depth sector insights, market situation and performance.
We understand that this is a targeted but also an open research. We would
be happy to provide further information to address any questions that you
may have on the report or for any specific sector or target business in
Vietnam.
Should you have any questions, please contact me or our Lead Analyst of
Consumer Finance, Ms. Oanh Tran at +84 (24) 3562 6962 (ext. 120) or her
email: oanh.trankieu@fiingroup.vn.
Yours sincerely,
Le Xuan Dong
Director, Head of Research and Consulting Services (“FiinResearch”)
FiinGroup Joint Stock Company

3
Abbreviation
NO. ABBREVIATION STAND FOR
1 1H First-half
2 2WL Two-wheelers loan
3 4WL Four-wheelers loan
4 9M 9 months
5 ASEAN The Association of Southeast Asian Nations
6 bn Billion
7 CAGR Compounded annual growth rate
8 CDL Consumer durables loan
9 CF Consumer finance
10 CIC Credit Information Center
11 CIR Cost to income ratio
12 CIs Credit institutions
13 D/E Debt to equity
14 ENR Ending net receivables
15 FinCos Finance companies
16 GDP Gross domestic product
17 GSO General of Statistics
18 IPS Intermediary payment services
19 KYC Know your customer
20 mn Million
NO. ABBREVIATION STAND FOR
21 NAPAS National Payment Corporation of Vietnam
22 NII Net interest income
23 NIM Net interest margin
24 NLB National loan book
25 NPAT Net profit after tax
26 NPL Non-performing loan
27 NTB New-to-bank
28 OPEX Operating expense
29 p.a. Per annum
30 P2P Peer-to-peer
31 POS Point of sales
32 ROAA Return on average asset
33 ROAE Return on average equity
34 SBV State Bank of Vietnam
35 TOI Total operating income
36 trn Trillion
37 VAMA Vietnam Automobile Manufacturers Association
38 VAMM Vietnam Association of Motorcycle Manufacturers
39 YoY Year-on-year
40 YTD Year-to-date

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Table of Contents
Section Content Page
Executive Summary 5
1. Updates of Vietnam CF market 6
1.1 Market size and growth 7
1.2 Market segmentation 9
2. Competitive landscape of finance companies 12
2.1 FinCos' fast facts 13
2.2 Changes in market size and market share 14
2.3 Product mix analysis 17
2.4 Financial benchmarking 25
3. Key development trends 32
3.1 Key driving forces and development trends that shape Vietnam Consumer Finance Market in 2020 and the years to come 33
3.2 Product development trends 35
3.3 Digital transformation in consumer finance 36
3.4 Emerge of alternative lending platforms and impacts 38
4. Regulatory updates 41

5
FE Credit
Home Credit
HD Saison
Mcredit
Shinhan Finance
Toyota Financial Services
Mirae Asset
JACCS
Others
What’s new
3) Reported NPL figures did not fully reflect the
asset quality picture of banks & FinCos
% of
NBL
1) CF growth plunged to single-digit growth lane
as COVID-19-driven slump spread
CF Market size (VNDtrn) and YoY growth
2) Most FinCos’ loan book scaled down as the
impact of the pandemic spread
Market share of FinCos, 2019 vs. 1H2020
Note: Others includes SHB Finance, Viet Credit, Easy Credit, Lotte
Finance, FCCOM and PTFinance. These figures do not include the
unlicensed and alternative lenders.
FinCos’ loan book YTD growth, 1H2020
NPL figures FinCos, 2019 vs. 1H2020
5) FinCos are evolving to cope with the changing
macro-economic environment
4) Slow credit growth caused by COVID-19
diminished net interest income of Fincos
2015 2016 2017 2018 2019 1H2020
VNDtrn
Home Credit
Shinhan Finance
Mcredit
FE Credit
JACCS
HD Saison
Mirae Asset
1H2020
2019
2015 2016 2017 2018 2019 1H2020
2015 2016 2017 2018 2019 1H2020
NIM figures FinCos, 2019 vs. 1H2020

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Contents
Section 1: Updates of Vietnam CF market

7
2015 2016 2017 2018 2019 1H2019 1H2020
VNDbn
1.1 Market size and growth
Source: FiinResearch. Data covering consumer finance of retail banks and active licensed
FinCos
xx% YTD
(1H2020)
CF as a %
of National
Loan Book
CAGR
2015 - 2019
YoY growth
1H2020
YTD growth
1H2020
CF
Banks’ CF
FinCos’ CF
Source: FiinResearch from SBV’s credit statistics, banks and FinCos’ financial statements
xx% YTD
(1H2019)
Table 1: Growth rate of CF market
Source: FiinResearch from SBV’s credit statistics, banks and FinCos’ financial statements
2015 2016 2017 2018 2019 1H2020
Banks' CF Active FinCos' CF
Figure 1: Total outstanding loans of consumer finance players,
2015 – 1H2020
Figure 2: Proportion of Banks’ CF and active FinCos, 2015 – 1H2020
First time in a decade, consumer lending growth plunges to single digit growth as COVID-
19-driven slump spread

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1H2019 1H2020
Trade
Consumer Finance
Industry
Construction
Agriculture, forestry and fishery
Transportation and Telecommunication
Others
2015 2016 2017 2018 2019 1H2019 1H2020
VNDbn
Credit Outstanding YoY Credit Growth
Source: FiinResearch from SBV
1.1 Market size and growth
CONTRIBUTION OF CF TO NBL
xx% YTD
(1H2020)
xx% YTD
(1H2019)
Source: FiinResearch. Total loans of these 26 selected banks accounted for xx% of NLB
Banks’ retail loans has outperformed corporate loans
thanks to consistent growth of consumer finance
1H2020
2019
Nonetheless, consumer finance remained the key growth driver for retail loans and
maintained its contribution to over xx% of the country loan book
Figure 6: YTD credit growth by economic sectors, 1H2019 vs. 1H2020Figure 5: Contribution of consumer finance to national loan book
Figure 4: Retail loans vs. Corporate loans growth (YoY), 2015 – 1H2020Figure 3: All credit institutions' outstanding loans and its growth,
2015 – 1H2020
35.2%
27.0%
25.0%
22.0%
18.4%
11.8%18.1% 18.6%
16.2%
8.1%
12.1%
8.6%
24.1%
21.8%
19.7%
13.9% 14.9%
10.1%
2015 2016 2017 2018 2019 1H2020
Banks' retail loans Banks' corporate loans Banks' total loans

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Contents

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Personal Loans/ Cash Loans & Others
Vehicles Loans (two and four-wheelers)
Consumer Durables
Credit Card
2015 2016 2017 2018 2019 1H2019 1H2020
VNDbn
1.2 Market segmentation
Source: FiinResearch
Note: FinCos offer 4 main products: Consumer Durables (Consumer electronics & Home
appliances), Vehicles Loans, Credit Card, and Personal Loans
Source: Estimated by FiinResearch
Note: Inactive FinCos (HAFIC & SBIC Finance, unlicensed lenders (such as ACS Trading),
fintech platforms (such as P2P) or alternative lenders (such as Doctor Dong), micro-credit
funds and people’s credit funds are not included in these figures.
FINCOS’ CF
1H2020
2019
CAGR 2015 – 2019 = xx%
xx% YTD
(1H2020)
FinCos sustained the double-digit growth despite the dual challenges of tightening lending
supervision and Coronavirus-induced stagnation
xx% YTD
(1H2019)
Figure 8: Loan proportion by product of active FinCos, 2019 vs. 1H2020Figure 7: Market Size (VNDbn) & YoY credit growth of active FinCos,
2015 – 1H2020

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2017 2018 2019 1H2020
% Homebuyers % Developers
Housing/ Home Improvement Loans
Credit Card
2015 2016 2017 2018 2019 1H2019 1H2020
VNDbn
1.2 Market segmentation
BANKS’ CF
CAGR 2015 – 2019 = xx%
xx% YTD
(1H2020)
The COVID-19 and tightening lending requirement on real estate loans restrained the
growth of commercial banks’ consumer lending portfolio
Figure 10: Loan proportion by product of Banks’ CF, 2019 vs. 1H2020Figure 9: Market Size (VNDbn) & YoY credit growth of Banks’ CF,
2015 – 1H2020
xx% YTD
(1H2019)
Figure 11: Developers vs. Homebuyers’ loans, 2017 – 1H2020
1H2020
2019
2019 1H2020
Consumer Durables
Personal Overdraft
Other purposes
(Educational/Medical/Travel/Sports loans)
Real estate loans
as a % of NLB

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Contents
Section 2: Competitive landscape of finance companies

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Note: (*) Fincos’ loan books shown above are comprised of loans to individuals, loans to corporates, etc. The numbers we used to calculate their market share in CF are loans to individuals only.
2.1 FinCos fast facts
No. FinCo Status Ownership structure Total Assets
(VNDbn)
Charter Capital
(VNDbn)
Loan Book (*)
(VNDbn)
In which
CF Loans (VNDbn)
% of CF Loans
(1H2020)
1 FE Credit Active
2 Home Credit Active
3 HD Saison Active
4 Mcredit Active
5 Shinhan Finance Active
6 Toyota Financial Services Active
7 Mirae Asset Active
8 JACCS Active
9 SHB Finance Active
10 Viet Credit (*) Active
11 Lotte Finance Active
12 EVNFinance (*)
(Easy Credit is the
consumer finance brand )
Active
13 FCCOM Active
14 PTFinance Active
15 HAFIC (*) InActive
16 SBICFinance (*) InActive

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Contents

15
FE Credit
Home Credit
HD Saison
Mcredit
Shinhan Finance
Mirae Asset
JACCS
SHB Finance
Viet Credit
Lotte Finance
Easy Credit
FCCOM
PTFinance
FE Credit
Home Credit
HD Saison
Mcredit
Shinhan Finance
Mirae Asset
JACCS
SHB Finance
Viet Credit
Lotte Finance
Easy Credit
FCCOM
PTFinance
FE Credit
Home Credit
HD Saison
Mcredit
Shinhan Finance
Mirae Asset
JACCS
SHB Finance
Viet Credit
Lotte Finance
Easy Credit
FCCOM
PTFinance
2019
1H2020
1. Among 16 FinCos with licenses, there are 14 active FinCos in 1H2020 (Inactive FinCos like HAFIC and SBICFinance are under special control of SBV).
2. This figure do not take into account the unlicensed and alternative lenders.
3. This figure includes the loan used only for consumer finance purpose, hence, FinCos’ institutional loans or syndicated loan with parent bank are excluded to better reflect CF loan book and
calculate CF market share.
(*) FCCOM & PTFinance reactivated their operation since late 2019.
(*)
(*)
1H2019, YTD 1H2020, YTD
2.2 Market share, market size and growth of finance companies
Loan book of most FinCos scaled down as the impact of COVID-19 began to unfold
Figure 12: Market size of FinCos (VNDbn), 2019 vs. 1H2020 & YTD growth, 1H2019 vs. 1H2020

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Others 2019 1H2020
SHB Finance
Viet Credit
Lotte Finance
Easy Credit
FCCOM
PTFinance
Total
Young FinCos managed to grab xx% further of market share from leading FinCos,
regardless the pandemic disrupted their pulse of rapid growth
2.2 Market share, market size and growth of finance companies
Figure 13: Market share of FinCos, 2019 vs. 1H2020
FE Credit
Home Credit
HD Saison
Mcredit
Shinhan Finance
Toyota Financial
Services
Mirae Asset
JACCS
Others
1H2020
2019

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Contents

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Credit card emerged as an optimal solution in response to tightening supervision on cash
loans and consumer preference for cashless shopping during the “COVID time”
Note: FinCos offer 4 main products: Consumer Durables (Consumer electronics & Home appliances), Vehicles Loans, Credit Card,
and Personal Loans.
2.2 Product mix analysis
FINCOS’ PRODUCT MIX
➢ Credit Card outperformed other product
segments in terms of outstanding loan growth.
➢ Cash Loans witnessed a slight increase (up xx% YTD) as
FinCos became more cautious in direct disbursement.
➢ Resulting from travel restriction measures, vehicles
loans decreased in both value and volume.
➢ Having approached saturation, CDL segment
witnessed a slight decline of xx% compared to 2019.
xx%
1H2020
2019
xx% xx%
xx%
Figure 15: Loan portfolio of FinCos, 1H2020Figure 14: Market Segment by Products 2019 vs. 1H2020 (VNDbn)
FE Credit
Home Credit
HD Saison
Mcredit
Shinhan Finance
Mirae Asset
JACCS
SHB Finance
Viet Credit
Lotte Finance
Easy Credit
FCCOM
PTFinance
Consumer Durables
Credit Card
2019 1H2020
2019 1H2020
2019 1H2020
Consumer Durables
2019 1H2020
Credit Card

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Home Credit
HD Saison
FE Credit
Mcredit
Mirae Asset
JACCS
Source: FiinResearchSource: FiinResearch
CONSUMER DURABLES
Figure 16: Market share in Consumer Durables, 2019 vs. 1H2020
Consumer Durables 1H2019
YTD Growth
1H2020
YTD Growth
1H2020
YoY Growth
Home Credit
HD Saison
FE Credit
Mcredit
Mirae Asset
JACCS
1H2020
2019
Table 2: Growth of Consumer Durables among active FinCos
2018 2019 6M2020
TGDD
2018 2019 6M2020
DMX
2018 2019 6M2020
FPT Shop
Figure 17: YoY growth of selected (*) retail chains’ number of stores
and net revenue, 2018 – 6M2020
Note: Dien May Xanh provides both consumer
electronics and home appliances,
Thegioididong and FPT Shop focus on
consumer electronics.
(*) The number of stores of these selected
retail chains accounted for xx% of total retail
chains in 2019 (FiinResearch estimated)
Consumer durables loans continued to slow down, driven by low performance of retail chains

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HD Saison
FE Credit
Home Credit
JACCS
Mcredit
Mirae Asset
Vehicles Loans
(two and four wheelers)
1H2019
YTD Growth
1H2020
YTD Growth
1H2020
YoY Growth
HD Saison
FE Credit
Home Credit
JACCS
Mcredit
Mirae Asset
Source: FiinResearchSource: FiinResearch
VEHICLES LOANS
1H2020
2019
Vehicle loans growth plunged due to lower travel demand during the COVID-19 pandemic
Figure 18: Market share in Vehicles Loans, 2019 vs. 1H2020 Table 3: Growth of Vehicles Loans among active FinCos

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2015 2016 2017 2018 2019 1H2019 1H2020
Unit
2015 2016 2017 2018 2019 1H2019 1H2020
Unit
Figure 19: Two-wheelers sales volume (Unit) and YoY growth,
2015 – 1H2020
Figure 20: Four-wheelers sales volume (Unit) and YoY growth,
2015 – 1H2020
CAGR 2015 – 2019 = xx% CAGR 2015 – 2019 = xx%
xx%
YoY growth
xx%
YoY growth
Source: FiinResearch estimated from VAMASource: FiinResearch from VAMM
VEHICLES LOANS
Vehicle sales plunged along with the saturation of the market and consumer sentiment
amidst the pandemic

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FE Credit
Viet Credit
Home Credit
JACCS
Lotte Finance
CREDIT CARD
Credit Card 1H2019
YTD Growth
1H2020
YTD Growth
1H2020
YoY Growth
FE Credit
Viet Credit
Home Credit
JACCS
Lotte Finance
Table 4: Growth of Credit Card among active FinCos
The credit card segment is characterized by domination of FE Credit and strong
competition with entrance of new players
Figure 21: Market share in Credit Card, 2019 vs. 1H2020 Figure 22: FE Credit’s active customers (mn), 2017 – 1H2020
1H2020
2019
2017 2018 2019 1H2020
No. Active customers (mn) No. Credit card customers (mn)

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PRODUCT TRENDS
MARKET POSITIONING
Section 2: Competitive landscape of Finance companies
CREDIT CARD
04/2015 12/2015 12/2017 04/2019 08/2019 08/2020 Coming soon
Launch
date
Credit card as a revolving credit line are strongly promoted by both incumbents and new
players

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FE Credit
Home Credit
Shinhan Finance
Mcredit
Mirae Asset
HD Saison
SHB Finance
Others
Market share of other companies 2019 1H2020
Lotte Finance
Easy Credit
JACCS
FCCOM
PTFinance
Personal Loans 1H2019
YTD Growth
1H2020
YTD Growth
1H2020
YoY Growth
FE Credit
Home Credit
Shinhan Finance
Mcredit
Mirae Asset
HD Saison
SHB Finance
Lotte Finance
Easy Credit
JACCS
FCCOM
PTFinance
Active FinCos
FCCOM and PTFinance only expanded their presence since late 2019.
Cash loans’ growth shrank to single-digit in the wave of rising credit risking during the
pandemic and SBV’s transition timeline to reduce proportion of cash loans
CASH LOANS
1H2020
2019
Table 5: Growth of Cash Loans among active FinCosFigure 23: Market share in Cash Loans, 2019 vs. 1H2020

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Contents

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Note: The loans we used to calculate above NIM include both CF loans and institutional loans as some FinCos listed above are general-licensed FinCos.
The TOI we used to calculated above NPM and CIR include Other income.
2.3 Financial benchmarking
KEY FINANCIAL RATIOS
EARNING QUALITY PROFITABILITY ASSET QUALITY EFFICIENCY
CAPITAL
STRUCTURE
NIM =
NII/Average loans
NPM =
NPAT/TOI
ROAA =
NPAT/Average
earning asset
ROAE =
NPAT/Average
earning equity
NPL
Provision
charge/TOI
CIR =
OPEX/TOI
D/E
2019 1H2020 2019 1H2020 2019 1H2020 2019 1H2020 2019 1H2020 2019 1H2020 2019 1H2020 2019 1H2020
FE Credit
Home Credit
HD Saison
Mcredit
Shinhan Finance
Toyota Financial
Services
Mirae Asset
JACCS
SHB Finance
Viet Credit
Lotte Finance
EVNFinance
(Easy Credit is
the CF brand of
EVNFinance)
FCCOM
PTFinance
Average

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FCCOM
Mcredit
Mirae Asset
SHB Finance
Lotte Finance
PTFinance
FE Credit
HD Saison
JACCS
Viet Credit
Shinhan Finance
Home Credit
Easy Credit
2019 1H2020
Source: FiinResearch. Average NIM of 14 active FinCos in 1H2020.
Note: NIM of FinCos might look different compared to our previous reports as we revised the
formula previously used to better reflect NIM of FinCos. Accordingly, NIM of FinCos is
recalculated using the formula: Net interest margin (NIM) = Net interest income/Average loans.
EARNING QUALITY
Slow credit growth diminished FinCos’ net interest income in 1H2020
Figure 25: Comparing NIM of FinCos, 2019 vs. 1H2020Figure 24: FinCos’ average NIM, 2015 – 1H2020
Sector avg. = xx% (1H2020) vs. xx% (2019)
2015 2016 2017 2018 2019 1H2020

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Lotte Finance
Viet Credit
FCCOM
SHB Finance
Mirae Asset
Mcredit
HD Saison
JACCS
Shinhan Finance
FE Credit
Home Credit
Easy Credit
Toyota Financial
Services
PTFinance
Lotte Finance
Viet Credit
FCCOM
SHB Finance
Mirae Asset
Mcredit
HD Saison
JACCS
Shinhan Finance
FE Credit
Home Credit
Easy Credit
PTFinance
2019
1H2020
Source: FiinResearch. Average NPL and Credit cost of 14 active FinCos in 1H2020.
ASSET QUALITY
NPLs accelerated, especially in FinCos with high exposure to cash loans, yet, reported figures
did not fully reflect the asset quality of the sector due to supportive policy at Circular 01
2015 2016 2017 2018 2019 1H2020
NPL of FinCos
Figure 27: Comparing NPL of FinCos, 2019 vs. 1H2020Figure 26: FinCos’ average NPL, 2015 – 1H2020
Proportion of Cash Loans

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2016 2017 2018 2019 1H2020
FE Credit
Home Credit
HD Saison
Lotte Finance
FCCOM
JACCS
Home Credit
HD Saison
Viet Credit
SHB Finance
Mirae Asset
Easy Credit
Shinhan Finance
Mcredit
FE Credit
PTFinance
2019 1H2020
2015 2016 2017 2018 2019 1H2020
EFFICIENTCY
Source: FiinResearch. Average CIR of 14 active FinCos in 1H2020.
FinCos managed to reduced operating expense, especially HR cost to maintain profit margin
Figure 30: Number of employees of Top 3 FinCos, 2016 – 1H2020
Source: FiinResearch Sector avg. = xx% (1H2020) vs. xx% (2019)
Figure 29: Comparing CIR of FinCos, 2019 vs. 1H2020Figure 28: Average cost-to-income (CIR) of Fincos, 2015 – 1H2020

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PTFinance
Shinhan Finance
FE Credit
HD Saison
Easy Credit
JACCS
Home Credit
FCCOM
Viet Credit
Mcredit
Mirae Asset
SHB Finance
Lotte Finance
2019 1H2020
Source: FiinResearch. Average NPM, Provision charge/TOI and Credit cost of 14 active FinCos
in 1H2020.
PROFITABILITY
Source: FiinResearch. PTFinance and FCCOM seemed odd as they only reactivated their
businesses since late 2019.
Figure 32: Comparing NPM of FinCos, 2019 vs. 1H2020Figure 31: FinCos’ average NPM, Provision charge/TOI and Credit cost,
2015 – 1H2020
Change in Provision charge
compared to 2019
2015 2016 2017 2018 2019 1H2020
NPM of FinCos Provision charge/TOI Credit cost
FinCos’ net profit margin plummeted along with acceleration of provision charge and falling
operating income

31
FE Credit
HD Saison
Shinhan Finance
Mcredit
Mirae Asset
Home Credit
JACCS
Viet Credit
SHB Finance
Easy Credit
FCCOM
PTFinance
Lotte Finance
2019
1H2020
FE Credit
HD Saison
Shinhan Finance
Mcredit
Mirae Asset
Home Credit
JACCS
Viet Credit
SHB Finance
Easy Credit
FCCOM
PTFinance
Lotte Finance
27.9%
36.9% 38.1%
24.0%
20.0%
17.8%
5.8% 6.8% 7.0%
4.8% 3.9% 3.5%
2015 2016 2017 2018 2019 1H2020
ROAE ROAA
ROAEROAA
PROFITABILITY
Source: FiinResearch. Average ROAA and ROAE of 14 active FinCos in 1H2020.
Sector avg. = xx% (1H2020)
vs. xx% (2019)
Sector avg. = xx% (1H2020)
vs. xx% (2019)
FinCos recognized worsening profitability ratios as a result of slow interest income and
rising impaired assets as the pandemic deepened
Figure 34: Comparing ROAA & ROAE of FinCos, 2019 vs. 1H2020Figure 33: FinCos’ average ROAA and ROAE, 2015 – 1H2020

32
Contents
Section 3: Key development trends
3.1
Key driving forces and development trends that shape Vietnam Consumer
Finance Market in 2020 and the years to come
33
3.2 Product development trends 35
3.3 Digital transformation in consumer finance 36
3.4 Emerge of alternative lending platforms and impacts 38

33
Regulatory
Changes
Consumer
Lifestyle
Consumer
Finance Market
COVID-19
Pandemic
Dominant trends created by these key driving
forces
3.1 Key driving forces and development trends that shape Vietnam Consumer Finance Market in 2020 and the years to come
The impact of COVID-19 pandemic, shift in consumer lifestyle and regulatory changes are
three key driving force of Vietnam Consumer Finance Market in 2020 and the years to come

34
FinCos to restructure product portfolio to get ready for recovery
Digital Transformation in Consumer Finance
Emergence of Alternative Lending
3.1 Key driving forces and development trends that shape Vietnam Consumer Finance Market in 2020 and the years to come
FinCos are expected to master latest key development trends and evolve rapidly to cope
with the ever-changing macro-economic environment

35
Credit card became a new key growth driver New forms of indirect/installment loans are launching FinCos are developing a variety forms of CLs
3.2 Product development trends
The transition away from cash loan will accelerate, facilitating credit cards and
diversification of indirect loans

36
CUSTOMER SOURCING
DISBURSEMENT
APPRAISAL
COLLECTION
STEP FIVE
APPLICATION
CONTRACT SIGNING
DEBT REMINDER
REPAYMENT
3.3 Digital transformation in consumer finance
FinCos are digitalizing end-to-end customer journey, increasing efficiency and improving
customer experience

37
CF products establish strong presence thanks to Fincos’ ecosystem and integration into
other apps
Integration of CF in digital
platforms
Integration of CF in parent
bank’s apps
Fincos Ecosystem
3.3 Digital transformation in consumer finance

38
Pawnshop P2P Lending Pay Later
3.4 Emerge of alternative lending platforms and impacts
Figure 35: P2P lending model
Alternative lenders have gained popularity in Vietnam thanks to their simplified
procedures and high demand for consumer credit

39
1
Online
Platforms
P2P
Lending
Models
2
Comparison
platforms
Business Model of Gobear:
3
P2P Lenders
operating like CIs
P2P lending has recently emerged in Vietnam and quickly developed into three models

40
RISKS
IMPACT ON
FINCOS
P2P lending platforms involve a high degree of risk and have a significant impact on the
performance of consumer finance market
DEFAULT
RISK
LACK OF LEGAL
FRAMEWROK
RISKS TO BANKS &
FINCOS
EROSION OF
FINCOS
MARKET SHARE

41
Contents
Section 4: Regulatory updates

42
DRAFT CIRCULAR AMENDING CIRCULAR 01
CIRCULAR 01/2020/TT-NHNN
SBV is going to issue the revised version of Circular 01 to add support for customer loans
disbursed between 23 Jan and 24 Apr

43
THE DRAFT CIRCULAR ON LIMITS
AND
PRUDENTIAL RATIOS OF NON-BANK
CREDIT INSTITUTIONS
KEY ONLINE
RATIONALES FOR
CHANGES
IMPLICATIONS
SBV is imposing tight supervision related to lending to real estate sectors of non-bank
credit institutions

44
KEY ACTION
IMPLICATIONS
DRAFT DECREE ON CONTROLLED
TESTING MECHANISM FOR
FINTECH IN BANKING SECTOR
SBV aims to encourage growth and innovation in Fintech, while maintaining stability and
safety of the financial market

45
SBV is going to promulgating a more comprehensive on non-cash payment. However,
foreign ownership is still a controversial topic
THE DRAFT DECREE REPLACING
DECREE 101/2012/ND-CP
KEY ACTION
RATIONALES FOR
CHANGES
IMPLICATIONS

46
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Publishing License No. 4217/2020CXBIPH/31-78/HD dated on 16 Oct 2020

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Head Office
10th Floor, Peakview Tower, 36 Hoang Cau Street,
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Tel: +84 24 3562 6962
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Director, Head of Market Research Services
T: +84 (024) 3562 6962 (ext. 110)
E: dong.le@fiingroup.vn
Nhung Nguyen
Client Advisor
T: +84-24-3562 6962
E: nhung.nguyenhoai@fiingroup.vn
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Consumer Finance in Vietnam - First-Half 2020 Review

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Consumer Finance in Vietnam - First-Half 2020 Review